TATA Aldesa (J.V.) Vs State of UP and 4 others (Allahabad High Court)
Once the amount has been refunded, we do not find any good reason for not paying the interest in terms of Section 56 of the CGST Act, 2017
Allahabad High Court addressed a writ petition filed by TATA Aldesa (J.V.), seeking payment of interest on a delayed GST refund of ₹38,10,351 as mandated under Section 56 of the CGST Act, 2017. Despite the refund being credited on November 7, 2024, nearly four years after the application was completed, the petitioner argued for interest at 6% per annum for the delay beyond 60 days. The petitioner contended that the liability to pay interest cannot be deflected due to disputes between State and Central authorities.
The Court found that the refund had been delayed without valid justification and rejected attempts by the State authorities to disown liability, citing a CGST circular requiring them to disburse both the refund and the interest. The Court held that inter-departmental disputes cannot deprive taxpayers of their statutory entitlements. Consequently, the Court ordered the State authorities to pay interest within a month, allowing them to resolve their disputes with Central authorities independently. The judgment reinforces the principle that taxpayers should not bear the burden of administrative inefficiencies.
